E-COMMERCE
E-commerce spending in Ireland falls
20-08-2002
by
The number of Irish people buying on-line in the last three months has fallen by 50,000, according to a new report released by Amarach Consulting.
On Tuesday Amarach released its latest "TrendWatch" report, which said that Internet penetration has now reached 38 percent of Irish adults, or an estimated 1,065,000 users. Importantly, according to Amarach, this represents a significant increase of 5 percent on last year.
"The rate of growth in Internet use has slowed down and Amarach expect this to continue," said Bettina MacCarvill, senior consultant Amarach. "We forecast that an additional 5 percent of Irish adults will go on-line within the next 12 months and that by mid-2004 almost half the adult population will be Internet users." The company went on to point out that in international terms, Ireland's Internet penetration percentage is on a par with the UK but lags behind the US, where Internet penetration is over 60 percent.
What may be more significant to Ireland's on-line businesses is that preliminary research from Amarach suggests that fewer Irish consumers are buying on-line, compared to figures from the beginning of the year.
"After months of continued growth, the numbers buying on-line fell for the first time in a year," Amarach said. According to the firm's research, around 188,000, or 18 percent, of Irish Internet users made an on-line purchase in the last three months, compared to 238,000, or 24 percent, at the beginning of the year.
"The slowdown may reflect slower domestic economic conditions," added Michael McLoughlin, director, Amarach. "It may also reflect seasonality not evident in the off-line market. The fact that travel services are a very significant component of on-line purchases may also be affecting the timing of on-line purchases." The company said that in Ireland, travel services, specifically airline tickets, continue to account for the bulk of on-line purchases while books, CDs and tickets for events also continue to be big on-line sellers.
The company went on to detail what drives Irish people to shop on-line, with 48 percent of respondents to its survey saying that the convenience of 24-hour shopping was the prime motivator.
"This was especially evident among 25 to 34-year-olds", said MacCarvill. "This is a money-rich, time-poor group who place real value on convenience and are willing to pay a premium to get it." Additionally, 45 percent said they could find lower prices by shopping on-line, and the ability to compare products and prices appealed most to 26 percent of respondents. Thirty percent of respondents said they preferred to shop on the Net in order to avoid sales people.
And although sales fell, the future for on-line shopping remains reasonable, Amarach clamed, with 30 percent of Irish Internet users planning to shop on-line in the next three months. Not having a credit card is the main barrier to on-line shopping, particularly among younger Internet users, the company claimed. Security concerns continue to be a barrier, with 66 percent of Internet users in the Republic saying that e-tailers are not doing enough to demonstrate the security of on-line shopping. "There appears to be a demand for a more visible security initiative among on-line retailers," McLoughlin commented. "Many Internet users remain unconvinced of the security of using their credit card on-line."
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